A blog exploring the intersection of economic thinking and urban planning/real estate development and related big-think themes.

Monday, November 12, 2012

Thriving and growing

In yesterday's NY Times, Adam Davidson wrote about "$5 Watches vs. $5 Coffee ... The battle for 29th Street might portend the future for the global economy. ... Years ago it no longer made economic sense to concentrate meatpacking in Lower Manhattan. But globalization makes a wholesale district in a crowded urban center more economically viable than ever." Read the whole thing.

It's a theme that Ed Glaeser and others have been developing for some years. New York has been and remains the #1 U.S. metro area for many years. How does it do it?

Consider that the NY urbanized area's share of 1950 U.S. population was just below 18 percent but has fallen steadily to just under six percent in 2010. But NY is still #1. The U.S. mean population center has been moving steadily southwest, but NY hangs in at #1.

Churn is the sign of a dynamic economy (though fighting it gives many politicians a career). The neighborhood churn that Davidson describes is the sign of a successful city -- which is an essential ingredient of a dynamic economy.

Immigrants keep refreshing the NYC talent pool. And there has to be enough regulatory flexibilty to permit the neighborhood evolutions that Davidson describes. He cites places with free WiFi where locals mix and mingle. He also notes "low-end glovalization" which "brings goods and technologies to the poor." This is some of the stuff that is bought for export to Nigeria on 29th Steet.

I have noted previously that the higher up the urban hierarchy, the greater the stability of city rankings. The bigger the place, the more likely that it will not slip in the rankings. A growing talent pool and flexible land markets are essential.

Letting the new talent in and letting the land markets churn is anathema to many political instincts, but it is the way places thrive and grow.